WEG proclaims funding of R$ 660 million to broaden engine manufacturing
Project foresees a 25% increase in the production capacity of industrial engines and construction of a new factory focused on electric mobility
THE WEG (WEGE3) announced this Tuesday, 27th, that it will invest R$ 660 million to expand its production capacity for industrial and electric traction motors in the Jaraguá do Sul industrial park, in Santa Catarina.
The investment will be carried out over the next three years and will involve the construction of a new factory dedicated especially to engines for the electric mobility. The delivery of the new factory, with 18,000 m² of built area, is scheduled for the first quarter of 2024.
The project also includes the expansion by 23,000 m² of the current WEG buildings for the manufacture of components and export logistics. WEG’s projection is that the entire investment will increase its production capacity of industrial motors by 25%.
Market analysts praised the allocation of resources. “The project reinforces our constructive estimates for the medium term and the company’s positive outlook for opportunities in electric mobility,” said analysts at Itaú BBA in a report.
Itaú BBA has a target price of BRL 36 for the share, with the model pricing in a 20% growth in the domestic industrial electrical and electronic equipment line in 2022 and 13% for 2023.
WEG’s industrial engines area had revenue of R$ 3.4 billion in the second quarter, representing 47.7% of the company’s net operating revenue in the period.
Eleven, with a target price of R$52 for WEG, also highlighted the company’s plans for the electric vehicle market. “The move is positive in our view, with the company showing its focus on capturing the energy transition and maintaining its diversification for the long term.”